A just-released report from the bean counters at the Congressional Budget Office is getting lots of attention because the bureaucrats are now admitting that Obamacare will impose much more damage to the economy than they previously predicted.

Of course, many people knew from the start that Obamacare would be a disasterand that it would make the healthcare system even more dysfunctional, so CBO is way behind the curve.

But whenever the CBO publishes new numbers, I cant resist showing how simple it is to get rid of red ink by following my Golden Rule of fiscal restraint.

Heres a chart showing projected revenue over the next 10 years, along with lines showing what happens if spending (currently $3.54 trillion) follows various growth paths.

The two biggest takeaways are that a spending freeze (similar to what we got in 2012 and 2013) would almost balance the budget in 2016 and would definitely produce a budget surplus in 2017.

I also highlight what would happen if politicians merely limited spending so it grew at the rate of inflation, about 2.3 percent per year. Under that scenario, the budget would be balanced in 2019 (actually a $20 billion surplus, but thats an asterisk by Washington standards).

In other words, there is no need to raise taxes. Its very simple to balance the budget without extracting more money from taxpayers.

And we have some additional evidence. Its a chart taken directly from the CBO report and it shows that revenues over the next 10 years will be above the long-run average. This is because even weak growth slowly but surely produces more revenue for Washington, in part because it gradually pushes people into higher tax brackets.

And this chart just looks at the next 10 yeas. If you peruse the long-run fiscal projections, youll see that the tax burden is projected to increase dramatically over the next several decades.

The moral of the story is that there should be tax cuts (ideally as part of tax reform), not tax increases.

P.P.S. And even though CBO is finally admitting some of the flaws in Obamacare, the bureaucrats are still unrepentant Keynesians. Check out this excerpt from a story in yesterdays Washington Post.

Rep. Chris Van Hollen (Md.), the top Democrat on the committee, cited the CBOs finding that the law will boost overall demand for goods and services over the next few years, This is because people benefiting from its expansion of Medicaid and insurance subsidies will likely have extra money to spend, which will in turn boost demand for labor over the next few years, the report says.

So CBO would like us to believe that the more money the government redistributes, the more growth well get. I guess this explains why France is such an economic dynamo.

More seriously, this is the same flawed analysis that allowed CBO to claim the so-called stimulus was creating jobs as employment was falling.

P.P.P.S. Heres a Center for Freedom and Prosperity video that I narrated back in 2010, which explains why it is simple to balance the budget. The numbers in the video obviously need to be replaced with the ones I shared above, but the analysis is still right on the mark.

P.P.P.P.P.S. Since we started this post by talking about how Obamacare is undermining the economy, lets close with a great example of Obamacare humor.

Remember Pajama Boy? Well, hes back for an encore performance thanks to some very clever people at Americans for Prosperity.

Theres no update, by the way, on whether being without a job impacts his chances of getting a date with Julia. Theyd make such a good couple.

This is amusing, but it surely isnt as funny as President Obamas Chief Economist, who actually argued with a straight face that it was a good sign that Obamacare was leading people to drop out of the labor force because unemployment might be a better choice and a better option than what they had before.

You know... that IS how the budget was balanced back in the 90’s. The Contract With America Republicans took the House in 1994. They SLOWED (not stopped) the rate of growth in spending... and, SHAZAM! They all got shell-shocked with a surplus two years later.

The same would happen now, IF......

5
posted on 02/07/2014 7:24:00 AM PST
by SomeCallMeTim
( The best minds are not in government. If any were, business would hire them!)

Go in any store, and everything you see on every aisle, is made in China.

You mean like bakery products, milk, eggs, sugar, cheese and stuff like that? You know grocery stores are stores too.

Speaking of other stores like Wal Mart for example. I find stuff that is made here in the US. Maybe you are not looking hard enough. One store whose inventory is entirely from China is Hobby Lobby. Maybe not entirely, but I have never found anything in there that is made in the US

9
posted on 02/07/2014 7:49:58 AM PST
by Kaslin
(He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)

I’ve been trying to avoid buying products made in china, especially food, and it’s not an easy process.

Perhaps we could work together to find products from other countries and we could publish a running list as we come across them.

There are some formerly trusted companies I’m learning to avoid, one being Dole. I recently discovered some diced pears that were processed in one country (not sure if it was china, or not) but the company was based in Iran.

Note to self, California has a “balanced budget”. Need more cash, raise taxes! I admit, I didn’t look at the chart, I am naturally skeptical... and hopefully wrong. Maybe this is the Wisconsin Model, yes?

16
posted on 02/08/2014 3:42:49 AM PST
by momincombatboots
(Back to West by G-d Virginia.)

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